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On our own behalf – The Beer Monopoly on the Forbes List „Best Booze Books of 2017“

We are speechless. Surprised. Humbled. Incredibly grateful. Our book The Beer Monopoly appears on this year`s Forbes List "Best Booze Books". No, no, it`s not the Forbes Rich List. Fat chance of us ever getting on to that one. The list was compiled by Tara Nurin and can be found here >>

 


 

Posted January 2018

Germany – AB-InBev sells two more breweries

AB-InBev has sold its breweries Hasseröder and Diebels to the German financial investor CKCF for an estimated EUR 200 million (USD 245 million). The deal is to be completed during the first half of 2018. AB-InBev started sales proceedings in mid-2017.

It was Belgium’s Interbrew which bought the Alt beer producer Diebels in 2001 and the eastern German brewery Hasseröder in 2002 as part of the Gilde group of breweries.

Interbrew paid approximately EUR 100 million (then USD 95 million) for Diebels and EUR 575 million (USD 513 million) for both Gilde and Hasseröder. In those days Diebels produced about 1.6 million hl beer. Today only about 300,000 hl.

When sold, the Gilde group produced an estimated 3 million hl beer. When AB-InBev disposed of Hannover’s Gilde brewery in 2015 for EUR 15 million (USD 16 million), its volumes had dropped to 150,000 hl from formerly 600,000 hl.

Hasseröder’s sales continued to climb to reach 2.7 million hl beer in 2012. But despite steep discounts in the off-premise, sales have since declined to 1.9 million hl in 2017.

Diebels and Hasseröder employ over 500 people combined. Read on




Germany – Beer production declines 2 percent in 2017

The decline was only 2 percent, but beer production still dropped to 93 million hl in 2017, the German Brewers Association reported. This was partly due to a drop in beer exports. Full year 2017 figures for beer exports are not available yet. In 2016 beer exports stood at 16.7 million hl. Krombacher Brewery managed to defend its position as the leading German beer brands in terms of domestic consumption.

 

Russia – Pilsner Urquell ceases production in Russia

After ten years, the Czech brewer Plzeňský Prazdroj has terminated the licensed production of its Pilsner Urquell brand at the Russian brewery Kaluga. From January 2018, the beer will only be produced in the Czech city of Pilsen, reports the online portal idnes.cz.

Since early 2017, Pilsner Urquell has been owned by Japan’s brewer Asahi, when it bought a host of eastern European beer brands, which had previously belonged to SABMiller, from AB-InBev for USD 7.8 billion.

Although Asahi explained that the move was in line with its new global strategy for the brand, the truth is that the Kaluga brewery has also changed hands from SABMiller to AB-InBev. Read on

 

Canada – Government introduces annual inflation-linked tax increase on beer

The federal tax on domestic and imported beer rose by two percent last year as part of the 2017 budget. It will continue to increase every year in line with inflation starting this April, it was reported. Beer Canada, an industry body, says almost half of what consumers pay right now for the average price of beer is tax. Read on


India – Kingfisher beer is losing market share

Brewers have long struggled to lure tipplers away from domestic rum and whisky. Despite the proliferation of bars and microbreweries across urban India, the country still has one of the world’s lowest per capita rates of beer consumption at just 4.6 litres. Heineken, AB-InBev and Carlsberg together control about 90 percent of the 26 million hl beer market.

The country’s largest brewer, United Breweries (UB), in which Heineken has a 43 percent stake, and AB-InBev have already launched their global brands to boost consumption and hike profits. Competition is rife as consumers are spoilt for choice. As many as 52 new beer brands and their variants were introduced in 2017, more than twice as many as in 2016. Read on


USA – VJ Mallya’s US craft breweries forced to close

As Mr Mallya sat trial at a UK Magistrate Court, over accusations that he defrauded a government-owned bank relating to the 2012 collapse of his Kingfisher Airlines company, his two US breweries brought down the shutters.

California’s Mendocino Brewing Co. and New York’s Olde Saratoga Brewing Co. have ceased business in mid-January 2018, impacting the operations of several other small companies which had their beers contract-brewed there.

The shutdown comes as the Indian government moves to have the Indian billionaire Mallya extradited from London on fraud and money laundering charges in excess of USD 1 billion, it was reported. Read on


UK – Asda and Aldi to ban the sale of energy drinks to children under 16

If pupils are fidgety and restless, teachers say, it’s often because they are on a legal high: energy drinks. On 18 January 2018, UK retailers Aldi and Asda said they will introduce an age limit as of March this year. The move comes after Waitrose announced that customers buying drinks after 5 March 2018 could be asked to show an ID. Read on

 

UK – Diageo and Pernod Ricard to ditch straws for cocktails

Doing their bit to save the planet from a deluge of plastic garbage, drinks companies Pernod Ricard and Diageo have announced plans to eliminate the use of plastic straws and stirrers.

That’s a shame, because why drink cocktails if they come without straws and gaudy umbrellas? But on a serious note, it’s high time these things are phased out. Read on

 

USA – Five of ten biggest craft brewers in bed with international brewers

US craft brewers are becoming more global, but not in a way you would have thought: it’s through takeovers or buy-ins by AB-InBev, Heineken, Mahou San Miguel, Sapporo, Duvel Moortgat, and FIFCO.

As the trade publication Beer Marketers Insights wrote recently, Mahou San Miguel’s transcation to buy 30 percent of the craft brewer Avery Brewing in Colorado in November 2017 has sparked new thinking about the penetration of US craft beer by international players.

Currently, five of the top 10 US craft brewers are, at least, partly-owned by international brewers. Although they are no longer recognised by the Brewers Association, they are still ranked as craft by Beer Marketers Insights. Read on

 

USA - US craft breweries count over 6,000 in 2017

Over 6,000 breweries operated in the US in 2017, according to the Brewers Association’s (BA) count. About 900 craft breweries operate in the largest state alone, California. Across the country, “83 percent of the population lives within 10 miles of a local brewery,” the BA reports. This number rises to almost 92 percent in California. That’s a lot of communities directly impacted by craft beer businesses.

In recent years the brewery count has literally shot up. For example, the number of breweries in California has tripled in just five years, up from 300 in 2012. Overall there are four times as many breweries as there were ten years ago.

This means that 3,600, or just under 60 percent, of the country’s operating breweries have been open for five years or less. Read on

 

UK – Molson Coors buys 300-year-old cider maker Aspall

After 12 months of negotiations, Molson Coors announced on 8 January 2018 that it has bought Aspall, the British cider brand founded in Suffolk in 1728 by Clement Chevallier. The firm, which is still run by family members, had an enterprise value in excess of GBP 40 million (USD 55 million), it was reported.

The Morning Advertiser publication says that the Chevallier family had invested all they could in the business, including taking out loans, but they were unable to continue the growth of the company without shouldering significant financial risk. Read on

 

Australia – Coopers Brewery celebrates successful 2017

Another exciting year for Australia’s family-owned Coopers Brewery from Adelaide. As said Managing Director Dr Tim Cooper, “in the 2017 financial year, we enjoyed further growth in our beer volumes of 2.9 percent. Our Coopers brands have continued to show some improvement, but we have also enjoyed good growth in our partner brands of Carlsberg, Sapporo, Brooklyn, Olympic and Thatchers.”

This past year, Coopers brewed about 830,000 hl beer, which is all the more pleasing as this marks the 24th consecutive year of growth in beer volumes against a backdrop of a shrinking beer market. Australian beer consumption has declined nearly 10 percent over the past eight years, Dr Cooper pointed out. Read on

 

Turkey – Rising tax on traditional spirit raki depresses sales

Turks like to joke that the best you can get from a mix of grapes, sugar and aniseed is raki. Until 2003 raki was manufactured in Turkey exclusively by the state. However, one year after the currently ruling party AKP took office (2002), the monopolist producer was privatized, allegedly in preparation for Turkey’s accession to the EU. Nothing has come of this yet, but one side effect is that suddenly dozens of raki brands of varying alcohol content, taste and aroma hit store shelves.

Although Turks on average consume only 1.5 litres of pure alcohol annually, per capita consumption of raki still came to 0.5 litres in 2015, according to the Turkish association of Traditional Spirits Producers. Read on

 

Germany – Carlsberg and union embroiled in dispute over redundancies

As Carlsberg is preparing to move its Holsten brewery from its inner-city site to the outskirts of Hamburg, 70 jobs could be shed. Therefore, in December 2017 more than 100 employees went on a four-hour strike because management had not offered to pay any compensation. Strikes are a rarely used weapon in labour disputes among German brewers and thus this action underlines the gravity of the situation. Carlsberg’s management had tried to obtain a temporary injunction but failed. The brewer argued that it had made it clear from the start that moving brewing operations to the new site in Hausbruch, outside Hamburg, would entail job losses, and called the strike unjustified. Read on

 

Vietnam – ThaiBev wins auction of brewer SABECO

ThaiBev, the brewer of Chang beer, which is controlled by the billionaire Charoen Sirivadhanabhakdi, emerged as the only bidder in the much anticipated privatisation of the country’s largest brewer SABECO. The auction was held on 18 December 2017.

Vietnam’s Ministry of Industry and Trade had put a 54 percent stake up for sale, although foreign investors were limited to a 38.6 percent stake.

ThaiBev employed a ruse in order to bid as a local and acquire all the shares on offer. Earlier it had purchased 49 percent stake in a Vietnamese food and beverage company, Vietnam F&B Alliance Investment Joint Stock Co. This company, which was incorporated in September 2017 for management consultancy and investment holding activities, owns Vietnam Beverage. It was this unit that registered for the SABECO auction.

At first, plenty of foreign brewers seemed interested in buying into SABECO. But in the end they all declined to join the fray, not least because the asking price of 320,000 dong (USD 14.09) a share was deemed very expensive.

ThaiBev’s Vietnamese unit paid about USD 4.8 billion or nearly 50 times SABECO’s profit, insiders say. That’s a lot of money… and reminds one of the crazy times of Chinese brewery acquisitions. Read on


Thailand – ThaiBev emerges as regional powerhouse

ThaiBev’s geographical and business diversification seems to have paid off. It could afford to buy a majority stake in Vietnam’s major brewer SABECO in December 2017 for about USD 4.8 billion whereas other foreign brewers balked at the price.

The costly investment is not going to bring down the house. This is underpinned by ThaiBev’s financial statement for the 12 months ending September 2017. Although the year was marked by a slowdown in consumption in Thailand during the mourning period for the late king and the implementation of a new excise tax act, ThaiBev’s turnover was nearly unchanged at THB 190 billion (USD 5.9 billion) compared with 2016, while net profit rose 38 percent to THB 34.7 billion (USD 1.1 billion). Read on


China – Asahi sells stake in brewer Tsingtao to Chinese firms

As could be expected, Asahi only managed to dispose of its 20 percent stake in the country’s number three brewer Tsingtao by putting it back into Chinese hands. In December 2017, it sold its holding to the conglomerate Fosun Group and Tsingtao itself for USD 941 million.

Fosun will pay about USD 847 million for an 18 percent stake while Tsingtao will pay approximately USD 94 million for the rest, it was reported.The deal is expected to close at the end of March 2018. Asahi purchased its Tsingtao stake for about USD 670 million in 2009 from AB-InBev. Read on

 

Australia – Chinese buy into wine company Kilikanoon

Apparently, Asian buyers like investing in Australia. After a wave of Japanese investments in Australian beer and food companies, it’s the turn of the Chinese.

In December 2017, China’s biggest and oldest wine company – Changyu Pioneer – entered into Australia via an AUD 21 million (USD 17 million) purchase of an 80 percent stake of the winery Kilikanoon Estate in the Clare Valley north of Adelaide. Read on


USA – Brewers Association ends campaign to buy AB-InBev

No one seriously believed that the Brewers Association (BA) would reach its lofty goal of collecting over USD 200 billion to buy the industry behemoth AB-InBev.

In December 2017 it ended its crowdfunding campaign “Take Craft Back” by admitting that it had fallen short of its goal. However, over the course of three months the BA managed to scrounge up an impressive USD 3.8 million in pledges from nearly 12,000 craft beer lovers.

Nonetheless, the campaign was considered a success because it proved a major win for member engagement. As said Julia Herz, the BA’s craft beer programme director: “We’re grassroots and scrappy, and our goal with this digital campaign was to move it from our brewers outward. […] We have yet to do the audit, but it’s fair to say that we had strong buy-in from our community of members. And it went beyond that, trickling all the way down to the consumer level.”

Ultimately, the campaign gave a boost to the BA’s independence seal, launched in June 2017, which the BA will continue to build. Only about half of the BA’s members – approximately 2,800 breweries – are using the seal in some way, Ms Herz added.

According to the BA about 6,000 breweries were in operation during 2017, with 98 percent of them small and independent craft brewers.


Australia – A seal for independent brewers urgently needed

The Independent Brewers Association (IBA) has developed an independence seal, which it plans to launch in early 2018. This seal, available exclusively to IBA’s 200 or so members, will enable consumers to readily identify beers produced by independent brewers, as opposed to larger corporate-produced beers.

The move reflects what has already happened in the UK and USA, where seals of independence are available. Read on

 

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